London close: Late fall pushes Footsie into the red

10th Nov 2011 16:38

The Footsie swung between gains and losses on Thursday, but finished slightly in the red after US stocks retreated in mid-morning trade on Wall Street.US DATA OFFSET BY FRENCH CONCERNSDriving gains in the afternoon was economic news stateside. The US Labor Department said that initial unemployment claims for the last week fell by 10,000 to 390,000, better than expectations of 400,000. Meanwhile, the US trade balance improved slightly in September, registering a deficit of $42.1bn compared with a revised $44.9bn the previous month, according to today's data from the US Bureau of Economic Analysis. Markets were expecting a wider deficit of $46.2bn.However, the top share index saw added selling pressure late afternoon with some observers calling attention to the fact that credit default swap prices on French sovereign debt have briefly moved above the record high of 202 basis points reached on the 22 September. As the markets were calmed by Italian bond yields coming down from their record highs yesterday, borrowing costs for French debt were on the way up with the yield on a 10-year bond rising 20 basis points to 3.4%.In other news, the permanent European bailout programme, known as the European Stability Mechanism (ESM), and which was expected to replace the current European Financial Stability Facility (EFSF) as of next year, may not be operational by mid-2012, reports Bloomberg Television. The news wire is reporting that differences between Germany and France over how to deal with possible bond losses are holding back the negotiations. ITALY YIELDS FALL BELOW 7%; BoE RATES UNCHANGED 10-year Italian bond yields were on their way down, hitting a daily low of 6.76%, after having hit an intra-session high of 7.4% yesterday, following a successful auction which saw healthy demand.While the borrowing rate edged below the key unsustainable level of 7%, it does not however mean that the heavily indebted nation is out of the water. "With 10-year yields starting to resemble those of Ireland prior to its bailout; the extreme of the trajectory past 7% and beyond left many feeling that Italy could be beyond redemption," said analyst Brenda Kelly at CMC Markets. Meanwhile, the Bank of England has kept its official Bank Rate at 0.5%, and voted to continue with its programme of asset purchases totalling £275bn financed by the issuance of central bank reserves. The decisions were expected. UK consumer economist Fionnuala Earley from RBS said, "there is no doubt that the monetary authorities will be considering their policy options given the depleting arsenal of ammunition at their disposal, particularly in the face of the ongoing Eurozone crisis." EXPERIAN UP, VEDANTA & ADMIRAL DOWNLeading the risers was Experian, the credit reference and anti-fraud company, which jumped nearly 6% after hiking its interim dividend by 14% following a strong financial performance in the first half of its financial year. Prime Markets said it expects the stock to retest its 52-week high of 841p in the coming weeks. Topping the fallers however was Vedanta Resources after attributable profit (which is the bottom line figure from which the company can distribute dividends without dipping into reserves) slumped from $337m to $28m at the half-way stage last year. Other miners' performances were not so bright either, with Xstrata, Randgold Resources, Kazakhyms and Antofagasta falling lower. Admiral also took a tumble. The insurance titan lost nearly 30% of its market value yesterday after it warned that full-year profits would be at the lower end of expectations. Both UBS and Credit Suisse downgraded their ratings on the stock today. Shares lost a further 7.7% today.Meggitt was heading lower after Citi downgraded the stock from buy to neutral. Shares in FTSE 250 repair services firm HomeServe roared higher today after it said it had restarted sales activity in a "limited way" following the suspending of its telesales operation 11 days ago. BCFTSE 100 - RisersExperian (EXPN) 826.00p +5.36%Morrison (Wm) Supermarkets (MRW) 317.80p +3.69%Resolution Ltd. (RSL) 263.10p +3.54%Cairn Energy (CNE) 285.90p +1.74%British Sky Broadcasting Group (BSY) 738.50p +1.65%InterContinental Hotels Group (IHG) 1,063.00p +1.53%Old Mutual (OML) 107.60p +1.51%Anglo American (AAL) 2,383.50p +1.30%ARM Holdings (ARM) 624.00p +1.30%Standard Chartered (STAN) 1,390.00p +0.94%FTSE 100 - FallersVedanta Resources (VED) 1,131.00p -9.52%Admiral Group (ADM) 820.00p -7.61%Meggitt (MGGT) 369.70p -4.32%Randgold Resources Ltd. (RRS) 7,250.00p -4.04%Essar Energy (ESSR) 274.20p -3.45%Hargreaves Lansdown (HL.) 487.30p -2.64%Schroders (Non-Voting) (SDRC) 1,109.00p -2.63%Antofagasta (ANTO) 1,159.00p -2.19%Rio Tinto (RIO) 3,419.00p -1.88%HSBC Holdings (HSBA) 496.95p -1.85%